Marketing Research

Marketing Marketing ResearchResearch

Chapter ThreeChapter Three

Copyright ©2011 Pearson Education, Inc., Publishing as Prentice Hall 3-2

Key Learning PointsKey Learning Points

The scope of marketing research The scope of marketing research activitiesactivitiesWhere to find secondary sources of Where to find secondary sources of informationinformationPrimary sources of marketing Primary sources of marketing research informationresearch informationDeveloping estimates of market Developing estimates of market potentialpotentialDeveloping sales forecastsDeveloping sales forecastsThe impact of the Internet on The impact of the Internet on marketing researchmarketing research


““Marketing research is the function Marketing research is the function which links the consumer, customer, which links the consumer, customer, and public to the marketer through and public to the marketer through information information –– information used to information used to identify and define marketing identify and define marketing opportunities and problems; generate, opportunities and problems; generate, refine, and evaluate marketing actions; refine, and evaluate marketing actions; monitor marketing performance; and monitor marketing performance; and improve understanding of marketing as improve understanding of marketing as a process.a process.””

- The American Marketing Association


Table 3.1Table 3.1Marketing Research FunctionsMarketing Research Functions


Marketing ResearchMarketing Research

Common Uses of ResearchCommon Uses of Research

Forecast salesForecast salesRefine product Refine product conceptsconceptsDevelop product Develop product strategystrategyUnderstand the Understand the competitioncompetition

Market Market segmentationsegmentationUnderstand Understand consumersconsumersPretest advertisingPretest advertisingMake price Make price changeschangesUnderstand Understand perceptionsperceptions


Figure 3.1Figure 3.1The Marketing Research The Marketing Research

ProcessProcess


““SecondarySecondary information sources are information sources are those that already exist and were not those that already exist and were not developed for the particular problem developed for the particular problem at hand.at hand.””

““PrimaryPrimary information sources are information sources are those that are generated for the those that are generated for the particular problem being studied.particular problem being studied.””

- Russell S. Winer


Table 3.2Table 3.2Marketing Research Data Marketing Research Data

SourcesSources


The Research ProcessThe Research Process

Internal Secondary Data Internal Secondary Data Sources:Sources:

Internal sources of information Internal sources of information exist within the organization.exist within the organization.

Past marketing plansPast marketing plansSales call reportsSales call reportsTransaction informationTransaction informationReverse engineering or Reverse engineering or benchmarking reportsbenchmarking reportsWeb site visitation informationWeb site visitation information



Internal Secondary Data Internal Secondary Data Sources:Sources:

Information specialists may help.Information specialists may help.

Intranets share information well.Intranets share information well.

Obtaining information in a usable Obtaining information in a usable format may be a problem.format may be a problem.

Other departments aren’t always Other departments aren’t always willing to share information.willing to share information.



External Secondary Data SourcesExternal Secondary Data SourcesTrade associationsTrade associationsGeneral business publications (e.g. General business publications (e.g. ForbesForbes))Trade publications (e.g. Trade publications (e.g. AdweekAdweek))Academic publications (e.g. Academic publications (e.g. Journal of Journal of AdvertisingAdvertising))Corporate reportsCorporate reportsGovernment publications and censusGovernment publications and censusInternet discussion groupsInternet discussion groups


Table 3.3Table 3.3Data Source ExamplesData Source Examples


Figure 3.2Figure 3.2“Toy Industry” Google Search “Toy Industry” Google Search

ResultsResults


Figure 3.3Figure 3.3Group Danone Screen CaptureGroup Danone Screen Capture



Sources of Primary DataSources of Primary Data

InformalInformal

QualitativeQualitative

ObservationObservation

SurveysSurveys

Panels Panels

ExperimentsExperiments

Models and Models and simulationssimulations



Primary Data Sources: InformalPrimary Data Sources: InformalMany types of informal sourcesMany types of informal sources

Not representative samplesNot representative samples

Can help to form hypothesesCan help to form hypotheses

Collected in different waysCollected in different ways


Table 3.4Table 3.4Qualitative versus Quantitative Qualitative versus Quantitative

ResearchResearch



Primary Data Sources: Primary Data Sources: Qualitative Qualitative

Small samplesSmall samples

Not appropriate for statistical Not appropriate for statistical analysisanalysis

Results should not directly lead to Results should not directly lead to decisionsdecisions

Produces consumer insightsProduces consumer insights



Primary Data Sources: Primary Data Sources: Qualitative Qualitative

Phenomenological studiesPhenomenological studies

Exploratory studiesExploratory studies

Clinical studiesClinical studies



Qualitative Research: Focus Qualitative Research: Focus GroupsGroups

May be used for exploratory, May be used for exploratory, clinical, or phenomenological clinical, or phenomenological purposespurposesSmall groupsSmall groupsDiscuss a topic in-depthDiscuss a topic in-depthModerators guide the discussion Moderators guide the discussion and report resultsand report results


IllustrationIllustration

Focus groups are often observed by the client via one-way mirrors.


Table 3.5Table 3.5Characteristics of Focus GroupsCharacteristics of Focus Groups



Qualitative Research: Focus Qualitative Research: Focus GroupsGroups

Most misused research technique Most misused research technique

Technological advances are Technological advances are altering focus group altering focus group administration.administration.

Zaltman metaphor elicitation Zaltman metaphor elicitation technique (ZMET)technique (ZMET)


Discussion QuestionDiscussion Question

Visit Decision Analysts’ website and quickly review the information related to Online Time Extended Focus Groups.

Next, watch the video to gain a better understanding of how it actually works.

What are some of the disadvantages and advantages of the online-time extended format compared to other methods?



Primary Research: Primary Research: Observations and Ethnographic Observations and Ethnographic ResearchResearch

Observation research:Observation research:One-way mirrorsOne-way mirrorsIn-home product auditsIn-home product auditsPhysiological measuresPhysiological measuresIn-store video monitoringIn-store video monitoring



Primary Research: Primary Research: Observations and Ethnographic Observations and Ethnographic ResearchResearch

Ethnographic researchEthnographic researchOften conducted by trained Often conducted by trained anthropologistsanthropologists

Virtual shoppingVirtual shoppingSee See demo



Primary Research: SurveysPrimary Research: SurveysQuestionnaires are administered as Questionnaires are administered as a form of quantitative research.a form of quantitative research.

Descriptive surveysDescriptive surveys

Scientific surveysScientific surveys

Key issues in survey designKey issues in survey designSampling considerationsSampling considerations

Type of survey to be usedType of survey to be used



Sampling considerationsSampling considerationsPopulation or “universe”Population or “universe”Sampling methodSampling method

Probability samples are preferred.Probability samples are preferred.Convenience samples may be used.Convenience samples may be used.

Drawing samplesDrawing samplesNonresponse bias can also damage Nonresponse bias can also damage the validity of the results.the validity of the results.


Table 3.6Table 3.6Trade-offs with Different Kinds of Trade-offs with Different Kinds of

SurveysSurveys


““A panel is a set of customers A panel is a set of customers who are enlisted to give responses who are enlisted to give responses to questions or to provide data to questions or to provide data repeatedly over a period of time.repeatedly over a period of time.”” ““The main benefit of a panel is the The main benefit of a panel is the ability to observe changes in ability to observe changes in behavior caused by changes in behavior caused by changes in marketing variables or other marketing variables or other factors in the marketplace.factors in the marketplace.””

- Russell S. Winer


IllustrationIllustration

Loyalty programs such as those found at Food Loyalty programs such as those found at Food Lion stores provide valuation information on Lion stores provide valuation information on household purchasing behavior.household purchasing behavior.



Primary Data Source: Panel Primary Data Source: Panel Data forms Data forms

Problems with panel data:Problems with panel data:Panel drop outPanel drop out

RepresentativenessRepresentativeness

Conditioning may occurConditioning may occur



Primary Data Source: Panel Primary Data Source: Panel Types of Panels:Types of Panels:

Continuous reporting panelsContinuous reporting panels•Ex: Ex: Mediametrix

Scanner panelScanner panel

Special-purpose panelsSpecial-purpose panels


ActivityActivity

Visit Visit IRI’s website to learn more about to learn more about scanner panels, the type of information scanner panels, the type of information collected, and how it can be used.collected, and how it can be used.



Primary Data Source: ExperimentsPrimary Data Source: ExperimentsExperiments determine cause & effect.Experiments determine cause & effect.

Experimental features:Experimental features:ManipulationManipulation

Control groupControl group

External validityExternal validity

Internal validityInternal validity

Conducted in the laboratory or fieldConducted in the laboratory or field



Primary Data Source: Models Primary Data Source: Models and Simulationsand Simulations

Developed to simulate a Developed to simulate a particular marketing problemparticular marketing problem

Regression is typically used to Regression is typically used to estimate the mathematical estimate the mathematical relationships between two relationships between two controllable marketing variables.controllable marketing variables.



Global Considerations in Global Considerations in Marketing Research:Marketing Research:

Research design is more complex.Research design is more complex.Difficulties will arise in establishing Difficulties will arise in establishing comparability and equivalence.comparability and equivalence.Standardization adds cost and time Standardization adds cost and time to research process.to research process.International marketing decision-International marketing decision-making has an intrafunctional making has an intrafunctional character.character.


Market Potential:Market Potential: ““The maximum sales The maximum sales of a product category reasonably of a product category reasonably attainable under a given set of attainable under a given set of conditions within a specified period of conditions within a specified period of time.time.””

Market Forecast:Market Forecast: ““The amount of sales The amount of sales of a product category expected to be of a product category expected to be achieved under a set of conditions achieved under a set of conditions within a specified period of time.within a specified period of time.””

- Russell S. Winer


Potential and ForecastingPotential and Forecasting

Market potential basic Market potential basic calculations:calculations:

Determine the potential buyers Determine the potential buyers oror users of the products.users of the products.

Determine the number of customers Determine the number of customers in each group of buyers as identified in each group of buyers as identified in step one.in step one.

Estimate the potential purchasing / Estimate the potential purchasing / usage rate.usage rate.


Table 3.7Table 3.7Market Potential IllustrationMarket Potential Illustration



Estimating sales potential:Estimating sales potential:Multiply market potential by Multiply market potential by projected market share.projected market share.

Consider the relationship of the Consider the relationship of the brand development index (BDI) to brand development index (BDI) to the category development index the category development index (CDI).(CDI).


Category Development Index Category Development Index (CDI):(CDI):

% of category sales in a geographic area X % of category sales in a geographic area X

100100% of the country’s population in area% of the country’s population in area

Brand Development Index (BDI):Brand Development Index (BDI):

% of brand’s sales in a geographic area X % of brand’s sales in a geographic area X

100100

% of the country’s population in area% of the country’s population in area



Table 3.8Table 3.8Cell Phone Sales/Price DataCell Phone Sales/Price Data



Why create forecasts?Why create forecasts?Helps to anticipate growthHelps to anticipate growth

Aids in production planningAids in production planning

Important for budgetingImportant for budgeting

Used in scenario planningUsed in scenario planning

Types of forecasting methodsTypes of forecasting methods



Judgment methods rely on pure Judgment methods rely on pure opinion.opinion.

Naïve extrapolation:Naïve extrapolation:Current sales + X%Current sales + X%

Sales force:Sales force:Compilation of sales force forecastsCompilation of sales force forecasts

Executive opinion:Executive opinion:Manager, internal or external expert Manager, internal or external expert opinionopinion

Delphi method:Delphi method:Jury of expertsJury of experts



Counting methods use Counting methods use customer data.customer data.

Market testing:Market testing:Focus groups, interviews, etc. Focus groups, interviews, etc. provide information for forming provide information for forming forecast.forecast.

Market surveys:Market surveys:Purchase intention survey Purchase intention survey questions are used to determine questions are used to determine sales forecast.sales forecast.


Table 3.9, Part 1Table 3.9, Part 1Summary of Forecasting MethodsSummary of Forecasting Methods



Time-series methods use past Time-series methods use past sales data.sales data.

Moving averageMoving averageExponential smoothing:Exponential smoothing:

Combines current period sales Combines current period sales with current period forecastwith current period forecast

Extrapolation:Extrapolation:Simple regression analysis or Simple regression analysis or analyzing slope of line and analyzing slope of line and extending to futureextending to future



Association and causal methods Association and causal methods develop statistical models develop statistical models relating market factors to sales.relating market factors to sales.

CorrelationCorrelation

Regression analysisRegression analysis

Leading indicatorsLeading indicators

Econometric modelsEconometric models


Table 3.9, Part 2Table 3.9, Part 2Summary of Forecasting MethodsSummary of Forecasting Methods


Executive SummaryExecutive Summary

Marketing research is critical.Marketing research is critical.Primary and secondary data are used.Primary and secondary data are used.Collect secondary research at the Collect secondary research at the beginning of a research project.beginning of a research project.Secondary data can be internal or Secondary data can be internal or external to the firm.external to the firm.Primary data comes from many Primary data comes from many sources.sources.Market potential estimates are useful.Market potential estimates are useful.Forecasts are useful and computed in Forecasts are useful and computed in many different ways.many different ways.


All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

Marketing Research

Business

Transcript of Marketing Research